Question 1

The Sell-to-Me Company is a fully integrated company that both produces goods and sells them at its retail outlets. After production, the good are stored in the companys three warehouses until needed by the retail outlets. Trucks are used to transport the goods from the three plants to the warehouses, and then from the warehouses to the three retail outlets.

• Using units of full truckloads, Table Q1a shows each plants monthly supply, and its shipping cost per truckload sent to each warehouse.
• For each retail outlet (RO), Table Q1b below shows its monthly demand, and its shipping cost per truckload from each warehouse.

Table Q1a. Each plants monthly supply and its shipping cost per truckload sent to each warehouse

To From	Unit Shipping Cost			Supply
	Warehouse 1	Warehouse 2	Warehouse 3
Plant 1	$200	$410	$360	300
Plant 2	$280	$350	$300	400
Plant 3	$320	$300	$270	200

Table Q1b. Monthly demand and its shipping cost per truckload from each warehouse

To From	Unit Shipping Cost
	RO1	RO2	RO3
Warehouse 1	$470	$505	$490
Warehouse 2	$450	$435	$520
Warehouse 3	$390	$410	$440
Demand	375	200	325

Management now wants to determine a distribution plan (number of truckloads shipped per month from each plant to each warehouse and from each warehouse to each retail outlet that will minimize the total shipping cost.

1. Draw a transportation network that depicts the companys distribution network.

2. Formulate a LP model for this problem.

3. Solve this problem using Excel solver.